Imagine your town has a local bike store called Brianna’s Bikes. After years of good business, a larger competing chain store opens up across the street. This new store, David’s Bike Depot, offers specials such as a family pack of helmets for a lower price and free bike tune-ups with a minimum purchase.

Question

Question
Use the passage to answer the question.
Which positive effects would likely result from this new competition? Select all that apply.
(1 point)
Responses

fewer choices
fewer choices

better prices
better prices

higher quality
higher quality

higher wages

Answer 1

The presence of competition between Brianna’s Bikes and David’s Bike Depot is likely to result in the following positive effects:

- **Better prices:** With a competitor offering deals and specials, Brianna’s Bikes may need to adjust their pricing strategy to remain competitive, which can lead to better prices for consumers. Similarly, David’s Bike Depot will have to maintain attractive pricing to draw customers away from the established local store. Price competition generally benefits consumers.

- **Higher quality:** In order to differentiate themselves from the competition, both stores might focus on offering higher quality products or services. For example, Brianna’s Bikes could emphasize the quality of their bikes and the expertise in their service department, while David’s Bike Depot might focus on the quality of their special offers and additional services, like the free tune-ups with a purchase.

The competition is less likely to result in fewer choices; it can actually lead to a wider variety of products and services as each store tries to appeal to different segments of the market or to offer unique items to attract customers. Regarding higher wages, the effect is ambiguous. While competition could potentially lead to a need for more skilled workers, which could drive up wages, it could also put a strain on the profit margins of the businesses, potentially limiting the ability to increase wages.

Answer 2

choose a answer

Answer 3

Apologies for the confusion earlier. The positive effects likely to result from this new competition are:

- **Better prices**
- **Higher quality**